Introduction of automated VAT regime is a new phenomenon in most developing and least developed countries. There are glitches at the initial stage, but given the transparency and efficiency of automation, most countries have either adopted the system or are in the process of doing so. Bangladesh too is going to introduce automated VAT system soon under the new VAT law. It is scheduled to come into force from July 01, 2017. The law was enacted in November 2012 and was set to be implemented from July 01, 2015. But due to unavoidable circumstances it got delayed. Now that all preparations are over to embrace the new technology-driven system, it is expected that with the successful administering of the fully automated system, the country's VAT system will be thoroughly revamped.
In the new VAT system, the VATable entities will require to be registered first. Following registration, they will require to maintain books of accounts from July 01, 2017. From August 01, 2017 they will be required to submit returns. Registration has now started on a limited scale. There are 168 business entities under the Large Taxpayers Unit (LTU-VAT). These 168 units and 30 top VAT paying units from each 11 VAT Commissionerates, i.e, a total of about 500 units are being registered now. They are now being asked to visit the VAT Online Project (VOP) office to make entry of their registration data into the system. Hopefully, by February 2017, online VAT registration will be open to all. Then the units, which are now registered under the current VAT system, will required to take fresh registration. Moreover, units which are eligible to get registration will also require VAT registration under the new system.
Online VAT registration will be done like online e-TIN. There will be a web portal of the National Board of Revenue (NBR), registration seekers will log-in there, fill-in the registration form and send it to the system. They will get back VAT registration certificate online. Those who are not equipped to do so themselves, can approach the VAT Service Centre where necessary assistance will be available for filing registration application online.
It can be mentioned here that near each VAT Commissionerate there will be a VAT Service Centre to assist the people. Those, who want to submit registration application in the form of hard copy, they can go to the VAT Division or Commissionerate office and submit the hard copy application. Those will be sent from there to the Central Processing Center (CPC) electronically. There will be a Central Processing Centre in Dhaka to make out soft copy from hard copy.
Maintenance of accounts is the next step following registration. From July 01, 2017 registered entities will require to keep their VAT records as per the format of the new VAT rules. Records can be kept in hard or soft copy. Those, who want to maintain records in hard copy, will require to have registers as per the format of the new VAT rules. In our present VAT system, many units are maintaining VAT accounts through software. Those will require to be customised as per the format of the new VAT rules. There will be guidelines from the NBR regarding the use of such software.
Return submission will be the next important step in the implementation of the new VAT law. Return of the month of July 2017 has to be submitted between August 01 and August August 15, 2017. Return will be filed in the same way as application for registration has to be filed. The registered entities will be able to log-in to the NBR web portal and have the return filing form. They can fill-in the form and send it to the system online. Registered entities, which can not do this themselves, can get assistance from VAT Service Centres.
These are the key steps VATable entities will require to know to switch over to the automated new VAT system. Many people are worried about the transition from the current system to the automated one. Many of them also do not have the knowledge about the features of the new automated VAT system. Once they learn about the new automated system, they will find it user-friendly.
Dr Md Abdur Rouf is First Secretary, National Board of Revenue (NBR). [email protected]